Shares of Yes Bank saw a positive opening for the second straight day on Monday. During the trade, the stock opened at ₹17.60 apiece against a previous close of ₹17.40 and rose further to hit an intra-day high of ₹17.80. At 11:45 a.m., the stock was trading at around ₹17.60, up by 1.15% on the NSE.
The stock increased 5% to ₹17.90 per share during the previous trading session on Friday, reaching a three-month high on the NSE after the US private equity firms Advent International and Carlyle Group Inc. received conditional approval from the RBI to own up to 9.99% each in the bank.
In an exchange filing, the private lender said the central bank has issued conditional approval to each investor with respect to the proposed acquisition by each of them of up to 9.99 percent of the paid-up share capital of the bank through subscription to equity shares and share warrants of the bank.
The stock increased 31% over the previous six months and 39.28% over the last one year, outpacing the Bank Nifty, which saw a return of 18.28% over the same period. At current levels, the stock is trading 45.45% higher than its 52-week low of ₹12.10 and just 3.57% away from its one-year high of ₹18.20.
On November 29, Yes Bank said that it had acquired a 9.9% stake in JC Flowers Asset Reconstruction Company (ARC) for ₹11.43 per share. The bank said it plans to acquire a further 10% shareholding in the asset reconstruction company, subject to requisite regulatory approvals.
In September, the bank approved the sale of stressed assets worth close to ₹48,000 crore to JC Flowers ARC, which has turned out to be the sole bidder for the portfolio.
In July of this year, the US-based asset reconstruction company (ARC) emerged as the base bidder for the proposed sale of the identified stressed loan book of Yes Bank, PTI reported.
The entire stock of these non-performing assets is legacy loans given out by the lender under older management. Transfer of the loans will result in a massive reduction in the bank's reported gross NPA ratio to under 2 percent from the present level of 12.89 percent.
Meanwhile, YES Bank is one of four banks selected by the RBI for the first pilot launch of India's central bank digital currency, referred to as Digital Rupee.
Yes Bank reported a net loss in the third quarter that ended in September despite a majority of the private sector banks reporting robust earnings.
The bank saw a 32.23% YoY decline in standalone net profit to ₹152.82 crore in Q2FY23 from ₹225.5 crore in the same quarter of the previous fiscal, due to a rise in provisioning. Sequentially, the net profit was down 50.80%.
However, the bank's core net interest income jumped 31.7 per cent to ₹1,991 crore during the quarter on the back of 11 per cent growth in loans and 0.40 per cent expansion in net interest margin at 2.6 per cent.
Non-interest income of the bank increased by around 18.2% year on year and quarter on quarter to ₹920 crore in Q2 FY23.
Total income during July–September 2022–23 rose to ₹6,394.1 crore from ₹5,430.3 crore in the same quarter of the previous fiscal year.
The bank's provisions for bad loans and contingencies rose to ₹583 crore, up 54 percent on a YoY basis and 234% on a QoQ basis.
The bank's gross non-performing assets came in at 12.89% in the second quarter of FY23, compared to 13.45% in the preceding quarter and and 14.97 per cent in the year-ago period.
Following the release of second-quarter earnings, domestic brokerage house, Nirmal Bang maintained a “sell” call on the stock, with a target price of ₹14.8 per share.
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